Bitcoin continues to move flat as part of a local downward trend. The current period is characterized by an impulsive false breakout of the boundaries of the fluctuation range, however, in general, the quotes have firmly settled in the $48k - $50k area. The market is still in a state of fear, and buyers are not active, which is why the price tends to move to the lower border of the flat channel. Despite this, there is every reason to believe that Bitcoin will go beyond the current range and resume its upward movement.
The main reason for the positive and possible growth in the price of bitcoin was the impulse V-shaped reversal of the S&P 500 index, which at the moment reached the previous maximum value at around $4,744.
Over the past two months, investors have tended to view BTC as a high-risk investment product that can bring profit over a certain time frame and ensure portfolio diversification. For similar reasons, market participants buy shares of the S&P 500 trading index. Due to the similar motives for the acquisition, a correlation has emerged between the index and bitcoin, which has only been strengthening over the past two months.
Thanks to the confident rebound in the S&P 500, we can assume that the cryptocurrency will repeat the dynamics of the index movement. If this does not happen, we can talk about a change in the priorities of BTC investors, as well as the negative impact of important economic events on the psychology of investors.
On December 15, the news that the Fed will accelerate the curtailment of the quantitative easing program may be confirmed. In the short term, this will have a positive effect on the bitcoin quotes paired with the U.S. dollar, but in the long term, this will lead to a decrease in the investment attractiveness of the asset. Moreover, I expect a decrease in correlation with the S&P 500 and an increase in investments in the trading index due to greater stability and less volatility.
Bitcoin's response to the impulse rally in the S&P 500 will reflect investor sentiment for the rest of December. If the coin gets out of the current flat channel, then this will mean an increase in the correlation between the index and the quotes of the digital asset. It will also signal the market that, due to the tapering of QE, BTC will be considered as a financial instrument, and not a means of protecting against inflation. This will be a positive outcome, showing the diversity of Bitcoin's potential as a financial instrument. If the price of the coin remains within the current range, then the passive bullish sentiment will remain until the end of December.
Bitcoin as of December 13 looks uncertain and continues to fluctuate without initiative within the local downward trend. Technical indicators do not show an unambiguous picture of what is happening, replacing weak downward impulses with ascending ones. At the same time, in the weekly range, the coin increased its growth to +2.6%, which indicates the presence of positive shifts and stabilization of the situation.
In the near future, you should not expect price spurts, since the asset is in the stage of flat accumulation, which may last until the end of this week. At the same time, there are a number of positive signals on the market that meant a trend reversal during previous correction periods.
The fear and greed index is at 28, although it did not rise above 16 on the weekend. Fear is gradually leaving market participants, which indicates the beginning of a corrective fall. This suggests that in the near future, bulls may try to storm the psychological mark of $50k, a bullish breakdown of which will give an impulse to move to the $52k-$54k area.
Most likely, the cryptocurrency will attempt to storm $50k with a subsequent decline to the support zone or 200MA, after which it will bounce to the upper border and try to break through it
